With oil sliding in recent days on a combination of greater inventory builds and production increases both in the US and in places like Libya and Canada, moments ago WTI jumped as much as 1.6% after it was trading as much as -1.4% following a Bloomberg report that Saudi Arabia claims that they expect a “substantial stock draws due to robust demand” in the second half, that Saudi crude exports in July will be equal to June’s and that August exports will drop by 100kb/d.

This is notable as so far this month, third party sources have reported that Saudi exports have been far lower than the large production increase that was supposed to happen.

The statement by the Saudi Energy Ministry also notes that an oversupplied market “repels potential investment in the oil industry, curtailing future supply”, and finally that Saudi Arabia will “only export barrels that are earmarked to match confirmed lifting requests by end users, and does not try to push oil into the market beyond its customers’ needs.”

The most likely reason for the sharp kneejerk higher is that many of the shorts that had piled on in recent days got spooked and promptly covered, sending WTI just shy of $70, a $2 swing on the day, and a move that may lead Trump to further angry tweeting in the next few hours.

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